Chapter 6 Process Selection Facilities Layout Line Balancing

Chapter 6 Process Selection & Facility Layout Process Selection – how will we produce? Facility Layout – arrangement of the workplace. Mc. Graw-Hill/Irwin Copyright © 2009 by The Mc. Graw-Hill Companies, Inc. All Rights Reserved.

Does Layout Matter? 1. Should we move the beverages first? 6 - 3

Does Layout Matter? Read…… • “Designing Supermarkets”, page 205/261. 1. Does the layout of the supermarket influence customers purchasing habits? 2. Identify specific layout strategies supermarkets use to get you to spend more (What are the most profitable items? Where are they? Why? 3. What is “the prison”? Mc. Graw-Hill/Irwin Copyright © 2009 by The Mc. Graw-Hill Companies, Inc. All Rights Reserved.

I. Process Selection • Process selection – Refers to the deciding on the way production of goods or services will be organized – It has major implications for • • Capacity planning Layout of facilities Equipment Design of work systems 6 - 5

Process Selection and System Design 6 - 6

Process Strategy • Key Aspects of Process Strategy: – Capital Intensity • The mix of equipment and labor that will be used by the organization – Process flexibility • The degree to which the system can be adjusted to changes in processing requirements due to such factors as – Product and service design changes – Volume changes – Changes in technology 6 - 7

Technology • Technology – The application of scientific discoveries to the development and improvement of products and services and operations processes • Technological Innovation – The discovery and development of new or improved products, services, or processes for producing or providing them 6 - 8

Technology for Competitive Advantage • Technological advances can lead to competitive advantage – Product technology • Increased market share and profits – Processing technology • • Improved quality Lower costs Higher productivity Expanded processing capabilities 6 - 9

Process Types 1. Job shop Small scale; customizable; craft 2. Batch Moderate volume of related items. 3. Repetitive/assembly line High volumes of standardized goods or services 4. Continuous Very high volumes of non-discrete goods 6 - 10

Types of Processing 6 - 11

Process Selection – how to decide among 4 choices? 1. Variety – How much? 2. Equipment flexibility – To what degree? Job Shop 3. Volume – Expected output? Batch Repetitive Continuous 6 - 12

Product-Process Matrix 6 - 13

Process Choice Effects 6 - 14

Product and Service Profiling • Process selection involves – Substantial investment in equipment – Has a very specific influence on layout • Product or service profiling – Linking key product or service requirements to process capabilities – Key dimensions relate to • • • Range of products or services that will be processed Expected order sizes Pricing strategies Expected frequency of schedule changes Order-winning requirements 6 - 15

Selecting a Process Selecting your process depends upon the characteristics of your product. For the following examples, what is the BEST process? Why? (1)Upscale, gourmet restaurant serving French cuisine, each meal prepared by hand by the Chef. (2)Cheesecake company specializing in 13 varieties of cheesecakes, shipped to individual customers and restaurants. 6 - 16

II. Facilities Layout • Layout – the configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system – Facilities layout decisions arise when: • Designing new facilities • Re-designing existing facilities 6 - 17

The Need for Layout Planning • Inefficient operations – High cost – Bottlenecks • Accidents or safety hazards • Changes in product or service design • Introduction of new products or services 6 - 18

The Need for Layout Planning • Changes in output volume or product mix • Changes in methods or equipment • Changes in environmental or other legal requirements • Morale problems 6 - 19

Layout Design Objectives • Basic Objective – Facilitate a smooth flow of work, material, and information through the system • Supporting objectives – – – – Facilitate product or service quality Use workers and space efficiently Avoid bottlenecks Minimize material handling costs Eliminate unnecessary movement of workers or material Minimize production time or customer service time Design for safety 6 - 20

Basic Layout Types 1. Product layouts 2. Process layouts 3. Fixed-Position layout 4. Combination layouts 6 - 21

Repetitive Processing: Product Layouts • Product layout – Layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow Raw materials or customer Material and/or labor Station 1 Material and/or labor Station 2 Material and/or labor Station 3 Station 4 Finished item Material and/or labor Used for Repetitive Processing Repetitive or Continuous 6 - 22

Product Layout: Advantages • • High rate of output Low unit cost Labor specialization Low material handling cost per unit High utilization of labor and equipment Established routing and scheduling Routine accounting, purchasing, and inventory control 6 - 23

Product Layout: Disadvantages • Creates dull, repetitive jobs • Poorly skilled workers may not maintain equipment or quality of output • Fairly inflexible to changes in volume or product or process design • Highly susceptible to shutdowns • Preventive maintenance, capacity for quick repair and spare-parts inventories are necessary expenses • Individual incentive plans are impractical What does the Product Layout (Assembly Line) gone wrong look like? http: //www. youtube. com/watch? v=8 BAqim. E 2 Dxg&feature=fvsr 6 - 24

Non-repetitive Processing: Process Layouts • Process layouts – Layouts that can handle varied processing requirements Dept. A Dept. C Dept. E Dept. B Dept. D Dept. F Used for Intermittent processing Job Shop or Batch 6 - 25

Process Layout: Advantages • Can handle a variety of processing requirements • Not particularly vulnerable to equipment failures • General-purpose equipment is often less costly than the specialized equipment used in product layouts • It is possible to use individual incentive plans 6 - 26

Process Layout: Disadvantages • • In-process inventory costs can be high Challenging routing and scheduling Equipment utilization rates are low Material handling slow and inefficient Complexities often reduce span of supervision Special attention for each product or customer Accounting and purchasing are more involved 6 - 27

Fixed Position Layouts • Fixed Position layout – Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed 6 - 28

Combination Layouts • Some operational environments use a combination of the three basic layout types: – Hospitals – Supermarket – Shipyards • Some organizations are moving away from process layouts in an effort to capture the benefits of product layouts – Cellular manufacturing – Flexible manufacturing systems 6 - 29

Service Layout • Service layouts can be categorized as: product, process, or fixed position • Service layout requirements are somewhat different due to such factors as: – Degree of customer contact – Degree of customization • Common service layouts: – Warehouse and storage layouts – Retail layouts – Office layouts 6 - 30

III. Line Balancing • Line balancing – The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements – Why is line balancing important? 1. It allows us to use labor and equipment more efficiently. 2. To avoid fairness issues that arise when one workstation must work harder than another. 6 - 31

Line Balancing is the process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements. ***** Open the Word file on the course website for Chapter 6 for specific notes on line balancing, examples, and homework. 6 - 32

Cycle Time • Cycle time – The maximum time allowed at each workstation to complete its set of tasks on a unit – Cycle time also establishes the output rate of a line 6 - 33

Cycle Time and Output Rate 6 - 34

How Many Workstations are Needed? • The required number of workstations is a function of – Desired output rate – Our ability to combine tasks into a workstation • Theoretical minimum number of stations 6 - 35

Precedence Diagram • Precedence diagram – A diagram that shows elemental tasks and their precedence requirements 6 - 36

Assigning Tasks to Workstations • Some Heuristic (Intuitive) Rules: 1. Assign tasks with no predecessors Or, proceeding tasks have been assigned. 2. Assign tasks in order of most following tasks Count the number of tasks that follow 3. Assign tasks in order of longest processing time. 6 - 37

Measuring Effectiveness • Balance delay (percentage of idle time) – Percentage of idle time of a line • Efficiency – Percentage of busy time of a line 6 - 38

Homework • Finish any examples in class notes • Page 281, problem 1, a, b, c, d, e • Page 281, problem 4, a (1, 2, 3, 4) • Page 281, problem 5, a, b, c (based on min. cycle time), d (use line balancing rules for this class) • Line Balancing Rules for this class – 1. Assign tasks with no prior tasks (or tasks have been assigned) – 2. Assign tasks with greatest number of following tasks – 3. Assign tasks with longest processing time. 6 - 39